Suns Schwartz Speaks Out on Linux, SCO

eWEEK: Some critics are saying that its not just Microsoft funding SCO but also Sun, citing the fact that you acquired another license from them recently, received warrants to buy shares in SCO and are losing the most customers in the migration from Unix to Linux. It thus makes enormous sense for Sun to fund SCO, their logic goes. How do you respond to that?

Schwartz: We took a license from AT&T initially for $100 million as we didnt own the IP. The license we took also made clear that we had rights equivalent to ownership. When we did the deal with SCO earlier this year we bought a bunch of drivers and when we give money to a company oftentimes we get warrants, which is part of the negotiations. I have warrants in 100 different companies, we have a huge venture portfolio. I cant do anything about the perception thats out there and to be blunt, I dont care as those people arent going to drive our future—customers are.

Resource Library:

eWEEK: So, does the uncertainty around Linux benefit Sun and Solaris?

Schwartz: We have an interesting migration opportunity now because we can go back with Unix that is familiar, we can deliver the Java Enterprise System pricing at $100 per employee, which allows them to run Solaris at infinite scale.

eWEEK: Are you hoping that these new Java systems will change the focus of Suns traditional revenue generation model?

Schwartz: I think it can definitely change our dialogue with our customers. If you look at our top 65 accounts, theres 10 million people there. At $100 each thats a billion dollars. So I think it certainly gives us a broader market opportunity, but Im not a good prognosticator about our revenue streams.

eWEEK: This is a subscription-based pricing model, which has not worked well for Microsoft in the past. Are customers willing to pay for a product on an annual basis and which they then also have to pay more for to get the perpetual rights?

Schwartz: Yes, the data remains theirs whenever they cancel. The objective is you get infinite rights to use it for three annual payments and in the end if you want you can buy out the license. Look at the only two comparisons I think are relevant: Microsoft and Red Hat. We will compete with them based on price because they cant match our price.

Next page: What will Microsoft and Red Hat do?